Team Blitz India
ABU Dhabi Investment Authority (ADIA), the largest sovereign wealth fund in the United Arab Emirates (UAE), is setting up a $4-5-billion fund to invest in India through a tax-neutral finance hub in Gujarat.
The regulatory authority for financial services at Gujarat International Finance Tec-City, or GIFT City, has granted in-principal approval to ADIA to set up the fund.
ADIA’s intention to establish a presence in the hub was first announced last July in a joint statement by India and UAE. The amount of investment planned and the approval from the regulatory authority has not been previously reported. With the approval, ADIA will become the first sovereign wealth fund to begin investing in India via GIFT City. The greenlight came days before prime Minister Narendra Modi’s visit Abu Dhabi to inaugurate the temple.
Since becoming prime minister a decade ago, PM Modi has visited UAE six times, strengthening ties with India’s third-largest trading partner. Trade between India and the UAE totalled $85 billion for the financial year ending March 2023, according to Indian Government data. The Arab nation is host to one of the largest Indian diaspora populations in the world at 3.5 million, which constitute almost 35 percent of UAE’s total population.
By the middle of this year, ADIA could start investing through this fund. The allocated funds would be invested in India over a period. ADIA and its wholly-owned subsidiaries has specifically been exempted from long-term capital gains taxes from Indian investments via a special provision introduced in 2020 and applicable till March 2025.
